Things to Know About The Kroger Co. (KR)

The dividend yield of Kroger stock was recently 1.8%, and it has grown by an annual average of about 11% over the past five years. Its payout ratio is very low, too, around 22%, suggesting plenty of room for further increases.

The stock’s valuation is appealing, with a recent P/E ratio of 12.4 comparing favorably with the company’s five-year average of 28, and a forward-looking P/E of 11.5 well below the S&P 500’s 14.6.

Kroger stock compares well with competitors, as well. Whole Foods Market, Inc. (NASDAQ:WFM) might have fatter profit margins, for example, but both its current and forward P/E ratios are above its five-year average of 28. Whole Foods Market, Inc. (NASDAQ:WFM) may be the go-to grocer for organic fare, but Kroger is increasingly offering organic items, as is even Wal-Mart Stores, Inc. (NYSE:WMT). Meanwhile, Wal-Mart Stores, Inc. (NYSE:WMT)’s current P/E is a bit above its 14.5 five-year average and its forward P/E a bit below. Its dividend, recently yielding 2.4%, has been growing faster, though, at a 15% average over the past five years. Wal-Mart Stores, Inc. (NYSE:WMT)’s revenue has been growing more slowly than Kroger’s.

The Kroger Co. (NYSE:KR) stock is worth considering if you’re looking for a solid long-term performer and a little dividend income. You might want to add it to your watchlist and review it further. A good place to start is the company’s own Fact Book.

The article Things to Know About Kroger Stock originally appeared on Fool.com and is written by Selena Maranjian.

Longtime Fool contributor Selena Maranjian, whom you can follow on Twitter, owns shares of Coca-Cola. The Motley Fool recommends Coca-Cola and Whole Foods Market. The Motley Fool owns shares of General Electric, International Business Machines, and Whole Foods Market.

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